Home Depot has agreed to pay $25.5 million to settle a lawsuit by California employees who complained they were not allowed to take lunch and rest breaks in violation of state law.
The Atlanta-based retail giant is the latest company to face a legal challenge based on California’s labor laws. Retailers Chico's, Abercrombie & Fitch, Costco and Guitar Center also have been sued by California employees. Sandy Springs-based UPS settled with its drivers who complained they didn't get breaks for $87 million. Wal-Mart is appealing a $172 million jury verdict in a similar case.
Stephen Holmes, a Home Depot spokesman, said the company settled because it was “the most expeditious and advantageous business decision – not because we believe there was any wrongdoing on our part.”
A Los Angeles Superior judge approved the Home Depot settlement in January. It came to light in the company's annual report to the Securities and Exchange Commission this month.
Plaintiffs' attorneys said they could not comment on details, but court documents show only California employees of Home Depot and Home Depot Expo from 2000 to 2009 are included in the settlement class. Home Depot has more than 200 stores in California, making it the retailer's largest U.S. market.
The class could number in the tens of thousands, and it appears most members would get no more than a few hundred dollars each, depending on hours worked.
Eight individual plaintiffs will get $25,000 and five will get $15,000 for their effort in bringing the cases.
The plaintiffs’ attorneys will receive $7.65 million in fees plus $751,712 in expenses, which is part of the $25.5 million settlement.
California requires that after five hours of work, an employee must be offered a 30-minute meal period, though it can be voluntarily waived, said Michael J. Walsh, of the Irvine, Calif., firm Walsh & Walsh. The lawyer, who was not involved in the Home Depot case but has followed it, called the California law one of the nation's strictest.
A full-time associate at Home Depot usually works an 8-hour day, according to Holmes, and would be offered an hour for lunch plus two fifteen minute breaks. The lunch hour would be unpaid, he said, though not the breaks. He said Home Depot reiterated its lunch and break policies to its California stores.
The settlement combined eight cases filed in California against Home Depot, the nation’s third largest retailer.
“One of the common themes I kept seeing, at least early in the decade,” said Walsh, “was a lot of companies that were headquartered outside of California tried to have national [labor] standards. But they came up against problems arising from California’s more worker-friendly laws.”
California law changed in the early 2000s, Walsh said, and some companies failed to make sure employees took their required lunch and rest breaks. If breaks aren’t taken, said Walsh, employees could be owed overtime pay per California law. He said some retailers were caught having employees clock out for lunch, but then asking them to work through their break if the store got busy.
In the UPS case, 23,600 California truck drivers claimed they were denied lunch breaks. The drivers were to receive anywhere from a few hundred dollars to $20,000 each from the 2007 settlement, according to news reports. UPS at the time said the dispute arose from a “rigid” new state law and that the company would comply with it.
Walsh said Home Depot, which has successfully defended other employee lawsuits in California, probably faced a toughter challenge this time.
“With that kind of track record, they are not likely to throw good money on a case where don’t see some exposure,” said Walsh. “This isn’t nuisance money.”
